He assassinated socialist Bavarian prime minister Kurt Eisner, the first premier of the People's State of Bavaria, on 21 February 1919.

His father, Count Maximilian von Arco-Valley (1849–1911) was a businessman and estate owner, whose elder sister had married John Dalberg-Acton, 1st Baron Acton.

"Arco-Valley may have decided to assassinate Eisner to prove himself "worthy" after being rejected for membership in the ultra-nationalist and Germanic neo-Pagan cult, the Thule Society, because he was of Jewish descent.

However, his action triggered retaliation by socialists, communists and anarchists throughout Munich, during which a number of people were killed, including Prince Gustav of Thurn and Taxis.

[6][7] "Eisner's death," as Hitler would later write in Mein Kampf, "only hastened developments and led finally to the Soviet dictatorship, or to put it more correctly, to a passing rule of Jews, as had been the original aim of the instigators of the whole revolution.

"[8] In reality, Adolf Hitler was, according to both archival records found in Munich and newsreel footage showing him as a mourner wearing a black armband at Kurt Eisner's funeral, a supporter of the Far Left Bavarian Republic and only switched to supporting the Far Right after the Republic's subsequent defeat by the White Guard and the Freikorps.

"[12] The surgeon who had operated on Arco-Valley, Ferdinand Sauerbruch, also praised him:[13] "For me there is no doubt that this man committed this deed out of a conviction that he was thereby doing his Fatherland a service.

Judge Georg Neithardt was also sympathetic:"Of course, there could be no question of a deprivation of civil rights, because the actions of the young politically immature man did not arise from base sentiments, but from ardent love for his people and fatherland, and were the result of the indignation against Eisner that prevailed in wide circles of the population.

The following day, the Bavarian government, under Justice Minister and German Democratic Party politician, Ernst Müller-Meiningen, passed a unanimous resolution commuting Arco's sentence to life imprisonment.

Initially he worked as editor of the newspaper Bayerisches Vaterland (Bavarian Fatherland), and later as director of state funded operations at Süddeutsche Lufthansa, from which he resigned at the beginning of 1930.